Arkansas Insurance Department goes after pharmacy benefit managers with hearings, $1.5 million penalties

LITTLE ROCK, Ark. – Arkansas is going after pharmacy benefit managers that the insurance department claims are violating state laws.

A release from Governor Sarah Huckabee Sanders' office on Tuesday said she was joining Insurance Department Commissioner Alan McClain in imposing penalties and hearings against four PBMs in the state.

PBMs are companies that negotiate drug prices and administer prescription drug provisions for health insurance plans, large employers and Medicaid recipients, acting as middlemen between pharmacies and patients.

The release said the state is focusing on four major PBMs: Caremark, Magellan, Express Scripts, and MedImpact. The four are alleged to have violated a June 28 bulletin from the insurance department advising PBMs to stop paying pharmacies below the national average drug acquisition cost (NADAC), with a $5,000 fine for each violation.